Petrol station owners cut their fuel prices after the government yesterday agreed to partially refund them for the loss brought about by the sudden drop in cost announced last week.

The partial refund covers the difference between profits made by owners when fuel prices rose earlier this year and the losses they will incur now that the prices have dropped, a government spokesman explained.

The cost of the refund has not yet been quantified, he said.

The agreement was reached during a meeting yesterday morning between Transport Minister Austin Gatt, petrol station owners and the Chamber for Small and

Medium Enterprises - GRTU, which represents them. The GRTU said it was "satisfied" with the minister's intervention and the government's decision to cut prices as it had been insisting on this for weeks.

Carlo Cini, head of the GRTU's petrol station owners' section, said that in light of the agreement all owners had revised their prices to reflect the new rates set by the government.

On Saturday, the government announced a 20 per cent reduction in fuel prices saying it was possible after Enemalta's previous fuel agreement had expired, which meant that the diesel and petrol consignment could now be priced at current market rates that fell below $40 a barrel last week.

The price of unleaded petrol per litre went down by 25c to 99 cents while the price of lead replacement petrol is €1.06, a reduction of 25c. Diesel now costs 99c a litre, 24c cheaper and kerosene went down by 30c to €1 a litre

This may have been good news for motorists but petrol station owners feared making a loss on the stock they had already bought. Many had stocked up for the Christmas period and said they could make losses of between €15,000 and €25,000.

The GRTU called on the government to refund the station owners and the government assured them that Enemalta officials will quantify their stock and would "take it from there".

But, rather than cutting down their prices immediately, some petrol stations decided to wait for Enemalta officials to visit their stations. The situation was remedied yesterday when all stations adjusted fuel prices downwards and as agreement was reached with the government.